DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SAHIBZADA AJIT SINGH NAGAR (MOHALI)

Consumer Complaint No.298 of 2017

                                             Date of institution:  20.04.2017                                             Date of decision   :  04.05.2018

Charanjeet Singh Saini son of Late Manmohan Singh Saini, resident of House No.1736, Ground Floor, Sector 34-D, Chandigarh.

…….Complainant

Vs

M/s. Lifestyle International Pvt. Ltd. The North Country Mall, NH 21, Mohali-Kharar Road, SAS Nagar, Punjab -140307 through its Proprietor/Manager/Authorised signatory.

                                                        ……..Opposite Party

Complaint under Section 12 of

the Consumer Protection Act.

Quorum:    Shri G.K. Dhir, President,

                Shri Amrinder Singh Sidhu,

                Mrs. Natasha Chopra, Member.

Present:     Ms. Vandana, counsel for the complainant.

                Shri Saurabh Gulia, counsel for the OP.

Order by :-  Shri G.K. Dhir, President.

Order

               Complainant purchased two products from OP having MRP of Rs.1,898/-. Discount @ 50% was offered, due to which discounted payable price was Rs.949/-. Further Rs.57.41 N.P. was charged extra from complainant and that is why he had to pay Rs.1,007.41 N.P. on this purchase effected on 15.01.2017 through invoice. Charging of VAT @ 6.05% on the discounted price alleged to be unfair trade practice and that is why this complaint filed for seeking refund of the extra paid amount of Rs.57.41 N.P. alongwith compensation for mental harassment and agony of Rs.50,000/-, but litigation expenses of Rs.20,000/- more claimed.

2.             In reply filed by OP, it is pleaded inter alia as if complaint is false, frivolous and vexatious due to which same is not maintainable. Besides it is claimed that no cause of action has accrued to complainant for filing this complaint. Moreover, this Forum has no jurisdiction to entertain and decide the issue pertaining to taxes. OP clearly mentioned words “conditions apply” and “VAT extra”, in all of its advertisements and marketing material. Copies of in-store displays and advertisements on the discount offer were displayed at various places inside the Lifestyle Store. Even complainant was informed about the discount offer. OP as per standard policy has displayed declaration for charging VAT on the discounted price. VAT is a statutory liability on OP. Charged VAT amount has to be mandatorily deposited with the Govt. exchequer. Total cash collected from complainant is less than MRP value mentioned on the price tag and as such OP has not charged any amount in excess of MRP. VAT to be charged by seller from buyer and thereafter the same has to be deposited in the concerned Govt. department. Admittedly the bill/invoice amount was of Rs.1,007.41 N.P. including VAT of amount of Rs.57.41 N.P. charged at rate of 6.05%. It is also admitted that discount offer was of 50% on the purchased products. Complainant was explained about the scheme and he purchased the products without raising any protest. Other averments of the complaint denied. It is claimed that sale price is defined in the Sales Tax Act and Punjab VAT Act, 2005 as the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade. Sales price enters into computation of assessee’s turnover for the purpose of assessment under Sales Tax Act.  Other averments of the complaint denied.

3.             Complainant to prove his case tendered in evidence his affidavit Ex.CW-1/1 alongwith documents Ex.C-1 and thereafter his counsel closed evidence. On the other hand, Shri Baljit Talwar, authorised representative of the OP tendered in evidence his affidavit Ex.OP-1/1  with document Ex.OP-1 and thereafter closed evidence. 

4.             Written arguments not submitted by any of the parties. Oral arguments heard and records gone through.

5.             It is not denied by OP in its written reply or in the affidavit of its authorised representative that MRP was inclusive of all taxes. Discounted price after 50% offer was of amount of Rs. 949/-. is a fact admitted by OP in written reply as well as through affidavit Ex.OP-1/1 of its representative. In invoice Ex.C-1 also it is mentioned that after offering discount of 50%, VAT of Rs.57.41 N.P is charged on the discounted price. Practice of charging VAT on the discounted price having MRP inclusive of all taxes has been deprecated by Hon’ble National Consumer Disputes Redressal Commission, New Delhi  in case titled as M/s Aero Club (Wood Land) through its Manager Vs. Rakesh Sharma bearing Revision Petition No.3477 of 2016 decided on 04.01.2017 as well as in case bearing First Appeal No.136 of 2017 titled as M/s Aero Club Vs. Ravinder Singh Dhanju decided on 23.05.2017 by Hon’ble State Consumer Disputes Redressal Commission, UT Chandigarh.  Ratio of both these cases fully applicable to the facts of the present case. So practice of charging VAT on the discounted price of the products having MRP inclusive of all taxes in this case certainly is unfair trade practice.

6.             Even if VAT to be charged from the buyer, despite that the terms of such practice can be changed by mutually arrived at contract through which the seller may undertake liability to pay VAT on the discounted price of a product having MRP inclusive of all taxes. It was OP itself who professed that MRP will be inclusive of all taxes and as such on the discounted price, OP by such undertaking bound to pay VAT or other taxes. Complainant on representation of OP of discount offer on product having MRP inclusive of all taxes, purchased the product in question from OP and as such now OP estopped by its act and conduct from claiming that VAT to be charged extra on the discounted price, especially when law on the subject referred above is to the contrary.

7.             Provisions of Sales Tax Act or VAT Act 2005 stands on different footing than that of beneficial provisions of Consumer Protection Act. Assessment of turnover of a trader for purpose of sales tax to be done under the provisions of taxation provisions for collecting revenue for the State, but under the garb thereof benefit of beneficial provisions of Consumer Protection Act cannot be denied to the consumers. So even if there may be responsibility of OP to collect VAT on the sold products, but despite that it is bound by its open offer of not charging VAT extra on the products having MRP inclusive of all taxes.

8.             Though it is contended that advertisements like  Ex.OP-1 (numbering 2) displayed for notice of consumers that VAT to be charged extra on the discounted price,  but there is nothing on the record to suggest as to at which conspicuous place of OP show room, such advertisement was put and as such virtually due notice of the scheme of charging extra VAT on discounted price is not given to complainant. It is the claim of complainant put forth in the complaint as well as in the submitted affidavit Ex.CW-1/1 that he raised protest regarding charging of extra VAT on the discounted price of the product having MRP inclusive of all taxes and as such it is not a case in which complainant paid the VAT on the discounted price without protest. As extra charged VAT amount not returned to complainant despite his asking on the spot as per contents of Para No.2 of complaint and supporting affidavit Ex.CW-1/1 and as such rule of estoppel does not denude  the complainant from filing this complaint, which otherwise is duly maintainable in view of above discussion.

9.             Counsel for OP claims that in view of order dated 16.01.2017 passed in CC No.460 of 2017 by Ld. District Consumer Forum, Amritsar in case titled as Manish Sharma Vs. Life Style International Private Limited, the amount of compensation and litigation expenses should not be more than Rs.1,500/-. That submission of counsel for OP has no force because this Forum is bound by decisions of Hon’ble State Commission or of Hon’ble National Commission only. Keeping in view the fact that complainant had to engage counsel for filing this complaint and even to bear expenses  on typing charges and paying requisite fee prescribed for filing this complaint, it is fit and appropriate to allow compensation for mental harassment and agony of Rs.2,000/- plus Rs.2,000/- more as litigation expenses. Refund of excess charged amount should be with interest @ 6% per annum w.e.f. the date of purchase till payment, so that loss suffered by complainant on account of excess payment may be mitigated.

10.            As a sequel of above discussion, the complaint is allowed with direction to OP to refund excess charged amount of Rs.57.41 N.P. (Rs. Fifty Seven and forty one naya paise) with interest @ 6% per annum w.e.f. 15.01.2017 till payment. Compensation for mental agony and harassment of Rs.2,000/- and litigation expenses of Rs.2,000/- more allowed in favour of complainant and against  OP.  Payment of amount of compensation and litigation expenses be made within 30 days from the date of receipt of certified copy of the order. Certified copies be supplied to the parties as per rules.  File be indexed and consigned to record room.

Announced

May 04, 2018.

                                                                (G.K. Dhir)

                                                                President

(Amrinder Singh Sidhu)

Member

(Mrs. Natasha Chopra)

Member